Over this weekend (April 18, 2015), Fannie Mae will be releasing the highly anticipated “Collateral Underwriter” (aka CU) to lenders. CU is intended to be a tool for lenders to use to help ensure the quality of appraisals on loans that originated as conventional/Fannie Mae. Fannie Mae’s tagline for CU is “Taking appraisal review to the next level”…many in the industry, from lenders, real estate brokers and appraisers, are a bit anxious over this new “tool”.
After this weekend, when a loan is ran through Fannie Mae’s automated underwriting system, the subject property’s appraisal will be ran through CU. CU will analyze the appraisal and provide a risk score from 1 to 5 with the higher number indicating a higher chance of risk with the appraisal. It will also include”risk flags” and “messages” with regards to the score the appraisal received. In addition, CU will provide up to 20 sales comparables for the subject property.
Appraisers do not have access to Fannie Mae’s Collateral Underwriter. CU is just intended for the lenders use. And although Fannie Mae states that CU is not mandatory – you can bet that lenders WILL address any issues (flags or high risk scores) that CU triggers.
Hopefully CU will not make a noticeable impact on the mortgage process to the consumer. It will be interesting to see how Fannie Mae’s wealth of information compares to what appraisers are currently providing.
We will know more next week!